Dive Brief:
- Walmart's U.S. store-fulfilled delivery sales jumped nearly 50% last quarter amid the retailer's ongoing push to accelerate shipping speeds, EVP and CFO John David Rainey said on an earnings call last week.
- About one-third of deliveries from stores in recent weeks arrived in three hours or less, with 20% of that portion arriving to customers in 30 minutes or less, according to Rainey.
- "We see billions and billions of units at a high growth rate being delivered same day and within same day from our store deliveries," Walmart U.S. President and CEO John Furner said on the call.
Dive Insight:
Faster deliveries leveraging stores have been a priority for Walmart amid deepening competition with Amazon, another company working to accelerate shipping speeds. Rainey said in a follow-up investor call last week that the push is worth it, as quick deliveries lead to more frequent orders from shoppers.
"As they realize that they can get those things that they want and need right away, we see that repeat purchasing behavior, which makes the share gains that we have very sticky," Rainey said.
Technological progress will also strengthen the consumer delivery experience, Walmart President and CEO Doug McMillon said on the earnings call. For example, tapping more into artificial intelligence could help the company boost the accuracy of its "dynamic delivery windows," which it will offer to 95% of U.S. households by the end of the year. Walmart's dynamic delivery algorithm analyzes local conditions to determine the most efficient driver routes and the estimated time of arrival for an order.
"One of the things that we've obviously got is a ton of data and it's not just product catalog data these days, it's delivery data," McMillon said. "It's real-time data. And the way that we can put that to work to understand the context in which someone's shopping is really exciting to think about."
The dynamic delivery window expansion aligns with Walmart's aim to reach 95% of the country in under three hours by the year's end. The retailer is currently at 93%, according to Furner.
Walmart is also working to boost delivery speeds for third-party sellers leveraging its fulfillment capabilities. Walmart Fulfillment Services now provides next-day delivery coverage in major U.S. cities, including Los Angeles, New York, Chicago, Houston and Atlanta, according to a Tuesday news release.
